MGCs have long played a pivotal role in seaborne LPG and ammonia trades even though they comprise just 9% of the global LPG fleet.
Apart from serving key LPG routes originating from the US and the Middle East, notably meeting India’s LPG demand, they also dominate the ammonia trade.
Since early 2025, MGC shipping rates, which typically follow the VLGC market, have diverged, showing a negative correlation, marking an interesting phenomenon in LPG shipping not seen since the 2015 market collapse, according to Drewry Maritime Research.
Older VLGCs offered at discounted rates have increasingly displaced MGCs on traditional short‑haul and mid‑haul routes.
The rise of shadow fleets in the Iran–China LPG trade, often comprised of ageing VLGCs, has also intensified competition for MGCs.
India’s LPG demand declined 4% YoY in 1H25. Upgraded port infrastructure favouring VLGCs—including at Pipavav—and cargo swaps in the US–China tariff context have created a long‑haul US–India trade route.
These shifts support VLGC deployment over MGCs.
The global seaborne ammonia trade has been stagnant, affecting vessel demand.
Of the 370+ proposed green ammonia projects, only a few aggregating 8 mtpa are realistic by 2028.
Competition with older VLGCs and limited ammonia demand continue to impact MGC employment.
MGC newbuild prices rose 24% since 2023, averaging $80 million in 2Q25, while TC rates declined and green ammonia projects remain slow to develop, deterring new orders.
Despite these headwinds, long‑term fundamentals may support the MGC segment. Rising LPG imports to Southeast Asia, growing US–Europe flows, limited fleet size, flexibility for ammonia or ethane trade, and fleet deployment in green ammonia trade underpin stable demand.